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U.S. v. Weatherford Services, Ltd.

 
:
Weatherford Services, Ltd.
:
DOJ Criminal
:
November 26, 2013
:
U.S. v. Weatherford Services, Ltd.
:
U.S. v. Weatherford Services, Ltd., No. 4:13-cr-734 (S.D. Tex. 2013)
:
Energy (Non-Utility)-Oil & Gas-Exploration/Production
:
Angola
:
2004; 2005; 2006; 2007; 2008
:
Officials at Sociedade Nacional de Combustiveis de Angola, E.P., a state-owned corporation in Angola in charge of exploration of oil and gas in Angola.
:
Weatherford International Ltd. is a multinational corporation that provides equipment and services to the oil industry in over 100 countries. Prior to March 2009, Weatherford was incorporated in Bermuda and headquartered in Texas. Weatherford Services Ltd. ("WSL") was a wholly-owned subsidiary of Weatherford, and managed many of Weatherford's activities in West Africa.

From around 2004 at least through 2008, WSL engaged in schemes to bribe officials at Sociedade Nacional de Combustiveis de Angola, E.P. ("Sonangol"), a state-owned corporation in charge of exploration of oil and gas in Angola. In one scheme, WSL established a joint venture with local entities controlled by certain foreign officials, without engaging in meaningful due diligence of the JV partners. When outside counsel raised questions about the legitimacy of the JV, Weatherford in-house counsel ignored the questions and also falsely represented that the JV had been vetted and approved by other outside counsel. The JV partners did not contribute capital, expertise, or labor, but only served as conduits through which WSL funneled payments to the foreign officials controlling them. In exchange, the foreign officials awarded the JV lucrative contracts, gave WSL inside information about competitors' pricing, and took away contracts from WSL's competitors to award them to the JV.

In the other scheme, WSL employees bribed a foreign official so that he would approve the renewal of a contract. WSL funneled the bribes through a freight forwarding agent it retained via a consultancy agreement. WSL did not conduct any anti-corruption due diligence on the agent, even though the agent refused to sign an initial draft of the consultancy agreement including an FCPA clause, stating "in view of the nature of the business I cannot accept the original wording." The contract was revised by removing the FCPA clause and simply requiring the agent to "comply with all applicable laws, rules, and regulations issued by any government entity in the countries of business involved." The renewal was subsequently approved.

:
Anti-bribery (Other Persons)
:
Fine, Plea
:
Fine of $420,000.
:
420,000
:
0
:
Offense Level
Base Offense Level: 12
Multiple Bribes: +2
High-Level Recipient: +4
= 18

Culpability Score
Base Culpability Score: 5
200+ employees, high-level personnel participated or condoned conduct: 3
Cooperation and acceptance of responsibility: -2
= 6

Base Fine: $350,000
Multipliers: 1.2/2.4
Fine Range: $420,000 / $840,000
:
Other Person
:
Foreign
:
Bermuda
:
Contract Procurement/Retention, Other Business Advantage
:
Not stated.
:
Cash, Travel, Wire/check
:
Freight-forwarder, Joint Venture
:
Not stated.
:
Angola
:
No
:
No